"The consequences of hospitals being under financial distress include closing all together, stopping particular services that may be very necessary to the community and struggling to maintain quality of care," said Josh Sharfstein, a pediatrician and former top health official for the city of Baltimore and the state of Maryland.

However, some suggest hospitals are being unduly alarmist about the effect the new law could have on hospitals.

"It's an attempt to get more money from the taxpayers through this legislation," said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents major employers on benefits issues.